Judgment summary
Bericap East Africa Limited, a manufacturer of plastic closures, appealed against a Kenya Revenue Authority demand for Kshs 3,709,485.00 in short-levied duties arising from the reclassification of an imported product, Induction Liner R-WSE-900F, from HS Code 3921.19.10 to HS Code 3923.50.90 (paragraph 5, 9).
The Respondent raised a preliminary objection asserting that the operative decision was an earlier Tariff Ruling dated 31st October 2024, which the Appellant had never challenged within the statutory review period (paragraph 88).
The Tribunal agreed, finding that the Tariff Ruling had attained finality and that the demand notice merely enforced crystallised tax liability rather than creating a new cause of action. The appeal was accordingly struck out as incompetent, and the substantive classification issue was rendered moot (paragraphs 92 to 106).
Background
The Appellant is a limited liability company incorporated in Kenya whose principal activity is manufacturing and trading in plastic closures (paragraph 1).
The Respondent conducted a desk audit for the period 2024 to 2025 which revealed that the Appellant had been classifying the item interchangeably between HS Code 4823.90.90 and HS Code 3921.19.10 (paragraph 3).
The Appellant was issued with a tariff ruling referenced KRA/CBC/BIA/THQ/610/10/2024 dated 31st October 2024, classifying the imported item Induction Liner R-Wise-900F under HS Code 3923.50.90 (paragraph 4).
The Respondent issued a demand letter dated 14th October 2025 seeking to recover Kshs 3,709,485.00 after retrospective application of the tariff ruling (paragraph 5). The Appellant objected to this demand on 13th November 2025 (paragraph 6), and the Respondent issued a Review decision dated 9th December 2025 (paragraph 7).
Being dissatisfied, the Appellant filed a Notice of Appeal on 13th January 2026 and a Memorandum of Appeal on 27th January 2026, raising a single ground: that the Respondent erred in reclassifying Induction Liner R-WSE-900F from Tariff No. 3921.19.10 to 3923.50.90, resulting in a demand for short levied duties of Kshs 3,709,485.00 (paragraphs 8, 9).
Core dispute
The Appellant contended that Induction Liner R-WSE-900F should be classified under Tariff Number 3921.19.10, as a plate, sheet, film, foil or strip of plastics, arguing that it is a liner affixed by pressure to a plastic closure and does not function independently as a closure (paragraphs 19 to 31).
The Respondent maintained that the product was properly classified under Tariff Number 3923.50.90 as a closure, on the basis that it functions as a sealing mechanism preventing leakage, contamination and tampering, regardless of whether it operates independently (paragraphs 68 to 78).
A preliminary issue arose as to whether the appeal was competent at all. The Respondent argued that the Appellant had never objected to the original Tariff Ruling of 31st October 2024 within the thirty-day period prescribed under Section 229(1) of the EACCMA, and that the subsequent demand notice of 14th October 2025 merely enforced that ruling rather than creating a fresh cause of action (paragraphs 84 to 97).
Court findings
The Tribunal found that the Tariff Ruling dated 31st October 2024 was the operative decision classifying the product under HS Code 3923.50.90, and that the Demand Notice dated 14th October 2025 merely quantified the short-levied duties arising from that earlier ruling, without introducing a fresh classification decision (paragraphs 84, 85).
The Tribunal held that the Appellant did not lodge an application for review against the Tariff Ruling within thirty days as required under Section 229(1) of the EACCMA, and there was no evidence that the Appellant sought an extension of time under Section 229(3) (paragraphs 86, 87, 99).
Relying on Commissioner of Customs and Border Control v Rex International Limited, Nairobi High Court Commercial and Tax Appeal No. E027 of 2024, the Tribunal held that a taxpayer who fails to seek review of a tariff ruling, or an extension of time, becomes bound by that ruling, and that a subsequent demand for taxes does not constitute a new cause of action capable of a fresh objection process (paragraphs 93, 94).
The Tribunal found that the Appellant's objection dated 13th November 2025 was directed against the demand notice rather than the Tariff Ruling, and was legally ineffective since the demand notice merely implemented an earlier, already final, decision (paragraph 95).
Applying the doctrine of exhaustion of statutory remedies, and citing Ripple Pharmaceuticals Limited v Commissioner, Customs and Border Control [2025] KEHC 806 (KLR), Njeri v Commissioner of Domestic Taxes [2025] KEHC 749 (KLR), Mereka v Samora M. Sikalieh [2023] KEHC 19953 (KLR), and Speaker of the National Assembly v Karume (1992) KLR 21, the Tribunal held that the Appellant was bound to comply with the statutory review procedure under Section 229 of the EACCMA before invoking the Tribunal's jurisdiction, and had failed to do so (paragraphs 100 to 102).
The Tribunal concluded that it lacked jurisdiction to entertain the appeal, since jurisdiction cannot be conferred by acquiescence or consent of the parties (paragraph 103).
Outcome
The Tribunal held that the Appeal was incompetent and struck it out (paragraphs 105, 107(a)).
Each party was ordered to bear its own costs (paragraph 107(b)).
The second issue for determination, concerning the correct tariff classification of the imports, was rendered moot as a result of the finding on jurisdiction (paragraph 106).
Major issues / areas of contention
- Whether the Appeal was competent, given the Appellant's failure to apply for review of the Tariff Ruling dated 31st October 2024 within the thirty-day period prescribed under Section 229(1) of the EACCMA, or to seek an extension of time under Section 229(3).
- Whether the demand notice dated 14th October 2025 constituted a new cause of action capable of a fresh objection, or merely enforced the Tariff Ruling that had already attained finality.
- Whether the Respondent was justified in classifying the imports under HS Code 3923.50.90 instead of HS Code 3921.19.10 (this issue was rendered moot following the finding on jurisdiction).